Central Bank of Iraq

Central Bank of Iraq

Payments Department

Work Regulations of Agents Providers of Electronic Payment Service

May version /2020

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Taking in consideration the development and spread of electronic payment operations and the fact that this bank is the
independent sectorial organization that are exclusively responsible for granting licenses to providers of electronic
payment services and to supervises them , the following regulations were issued based on Article 4/h of the Central
Bank of Iraq Law No. 56 of 2004, in line with international standards, and best practices to regulate the work of
electronic payment service providers with their agents throughout Iraq, categorized according to the nature of the agency
granted to them.
Chapter I
Definitions-
For the purposes of these regulations, the expressions in the verse have the meanings indicated opposite them:
1 - Bank: Central Bank of Iraq.
2 - Electronic Payment Services Provider: Any entity licensed by the bank to provide Electronic Payment Services.
3- Agent of electronic payment services (principal or sub-agent): person (Physical/Legal) who is authorized from
electronic payment service provider to act in its behalf in accordance with the nature of specified activity set forth in the
concluded contract.
4- The agent of the foreign exchange services provider (principal or sub-agent): person (legal) who is authorized by
foreign transfers’ services provider to carry out works by sending and receiving financial transfers inside and outside
Iraq without keeping clients’ deposits.
5- Client: person to whom payment is to be made or ordered.
6- Know your client: Procedures (Know your client) to be taken to verify the identity of the client in accordance with
laws.
Chapter II
First: Agent Requirements
Payment service providers shall carry out the initial and continuous assessment of the person to be appointed as an
agent, and verify its suitability to work through the policies and procedures of due diligence of the agent, as follows:
1- Any person seeks to be appointed as agent by the payment service provider shall submit the following documents:
A - Name.
B- Certificate of incorporation, valid work license, or the permission to conduct any legal trade activity at least (18
Eighteen Months) prior to the date of application.
C - Geographical location, postal address, telephone number and working hours.
D – Any other information that payment service provider may request.
2 - The payment service provider must verify:
A- The identity of the agent by scrutinizing his documents and papers mentioned in paragraph 1 above, and ensuring the
validity of their issuance from approved sources, excluding it in the event of providing false or inaccurate information,
and taking appropriate measures against it.
B- The lack of negative indicators in the credit bureau and any security or judicial indicators taken against it.
C- The ability to deal with cash financial movements and manage them efficiently and review records and matches of
the financial operations carried out through it.
D- The ability to maintain the security and protection of clients’ data and information and their records, and to deal with
their complaints.

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E- The agent has to have a bank account.

F-Any other requirements that provider sees them appropriate.

Second – Appointment of Agents

1- The electronic payment service provider shall organize the relationship with its affiliated agents (principal and sub-
agent) according to contracts that show the roles and responsibilities of each party, while ensuring that these contracts
comply with these controls and any instructions issued by the bank, so as to ensure that the provider exercises
appropriate control measures over the activities of its agents taking into account that a copy of the draft contract
formula that will be approved and referred to above is presented to the bank to obtain the bank approval before signing
in order to be approved prior to appointment of agents later without the need to get approval for each agent appointment
while complying with the bank’s instructions to include the names of the agents in a special monthly updated record for
that or when any change occurs, and sending a copy of it to the bank.

2 - A provider of electronic payment services that seeks to authorize a third party to provide electronic payment services
shall at least present the data below to this bank:
A- The proposed number of agents in each governorate and according to the geographical area.
B- Classification of the agents according to the services they may provide.
C- Describe the mechanism which the service provider will take for monitoring the work of the agent.
D- Policies and procedures for agents, including:
*- Agent due diligence policies and procedures.
*- Combating money laundering and terrorist financing policies and procedures.
*- Risk management policies and procedures.
*- Operational and organizational policies and procedures.
*- Legal and punitive measures taken against violating agents.

Third- Types of Agents:

The type of agent is identified according to the nature of the services to be provided whether the agent is a main of
secondary as follows:
1- Agent of Card Payment Services Provider:
A- The payment service provider is responsible, before the bank, for any behavior of the agent whether the agent is a
main of secondary regarding the electronic payment services.
B- The payment service provider must specify the services provided by the agent set forth in the concluded contract
according to the license granted to it, and as shown below:
*- Clients Registration.
*- Sale of prepaid cards for the benefit of the issuing party.
*- Balance inquiry.
*- Issuance of statements for small payments.
*- Make deposits (Cash In) for prepaid cards, according to regarding instructions.
*- Any other services to be determined by the provider, in accordance with the needs of the market with coordination
with the bank.
2- Agent of mobile payment service provider:
A- The service provider is responsible before bank regarding to the provided service by the agent, whether it is principal
or sub-agent in relation to electronic payment services.
B- The main agent is allowed to conduct the transfers of money to and from the governorate of the affiliated sub-agents
under the agency contract.
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C- Principal agents are prohibited from transferring money among them.
D- Sub-agents are prohibited from carrying out transferring money among them with the exception of sub-agents who
are affiliated with one main agent and within the same governorate.
E- The payment service provider must specify the services provided by the agent, as stated in the concluded agency
contract in accordance with the license granted to it as described below:
*- Registration of agents and clients.
*- Money deposit (cash in) in the agents and clients’ governorate.
*- Money withdrawal (Cash out)from agents and clients’ governorate
*- Balance inquiry.
*- Issuing statements special for transfers.
*- Any other services determined by the provider in accordance with the need of market in coordination with bank.
3- Agent of foreign transfers services provider:
1- Entities specified by the bank have the right to work as a principal or sub-agent.
2- The main agent is responsible before the bank for any behavior by it or its sub-agent.
3 - The main agent is entitled to appoint sub-agents or their representatives to provide foreign wire transfers services on
its behalf after obtaining pre-approval of this bank is provided.
4- The organization of the relationship with the main and sub-agents is concluded according to contracts that guarantee
the rights and obligations of the sub-agent, ensuring that it follows the policies of combating money laundering and
terrorist financing.
5- The sub-agent may not perform money transfer services unless prior approve of foreign wire transfer service
provider.
6- The principal agent shall provide the bank with all the required information periodically, and according to what is
provided or upon request.
7- The principal agent shall ensure his compliance and the compliance of the sub-agents affiliated with it with the laws
and instructions of combating money laundering and terrorist financing, and any instructions or controls issued in this
regard, or the related laws, and to be aware of and take caution against fraud.
8- The principal agent may suspend work of any sub-agent who is affiliated with it, or to terminate its employment when
that agent fails or incapable to perform services related to finance transfers or any other performances or violet laws and
regulations issued for this regard, and it must notify the bank for that.
9- The sub-agent must keep a documentary book group different from the company’s main activity, and then unify its
activity as sub-agent with its company’s activity, and the bank has the right to sanctify these records.
10- The principal agent shall install software and systems at the stations set up by the service provider; to provide the
money transfer service, and in each of the sub-agent’s sites, so that the ownership of those programs and any copies
remain as right of the foreign transfer service exclusively.
11- The principal agent shall provide training to the sub-agent and its staff to work on providing money transfer
services.
12- The sub-agent shall maintain the confidentiality of the clients' personal information and not disclose it. 13- The sub-
agent is not entitled to add any prices other than what has been decided with the provider.
Fourth - Agency Contract:
1 –Regulating contract will organize the relationship between the payment service provider and the agent - at least – as
the following provisions:
A- Type and nature of the services to be assigned to the agent and the scope of its work.
b- Rights, responsibilities and obligations of both parties.
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C- Procedures to reduce risks associated with the services provided by the payment agent, including limits, clients’ transactions,
cash management, cash protection, protection of agent locations and the procedures followed to ensure the protection of clients’
funds.
D- Expressly that the bank has the right to access to systems, documents, reports, records, staff and the places of the agent, at the
time it sees appropriate.
E- Requirements for combating money laundering and terrorist financing.
F- Expressly implying that any information or data collected by the Agent, in connection with the services
That agent provides, whether from clients, payment service provider or from other sources are ownership of the payment service
provider.
G- Sufficient regulatory guarantees for the payment service provider to treat the cases of the agent's non-compliance with the
stipulated obligations.
H- The agent's working hours.
I- Compliance with the controls and instructions in force.
j- The agent shall have appropriate amount of currency to meet the needs of clients.
K- Technical description of electronic devices.
L- Determine of details of the agent payments.
M- The presence of an express provision stating that the agent must record the transactions executed by it to the records of the
service provider at the end of the next working day as maximum.
N-determine the mechanism on the basis of which the terms of the contract and the conditions for its termination will be changed.
O- The mechanism of the process of flow of cash between the provider and the agent.
P- The geographical location of the agent.
Q- Specifying a term for the contract, subject to renewal or cancellation, with the agreement of the parties.
2 - The payment service provider has the right to add other conditions as necessary on the agent to provide its services after
obtaining the bank approval.
3- Agent employees may not be treated as employees of the payment service provider, and the rights and obligations of such are to
be agreed between the payment service provider and the agent.
Fifth - Termination of agency contract
1- In addition to the provisions for termination of the agency as specified in the contract, the service provider has the right of
terminating or canceling the agency contract if the agent does the following:
A- Continuing to provide its services as payment agent when its business stops.
B- Committing a crime involving fraud, deception or any other financial offense, or has been dissolved or liquidated by the court,
etc.
C- Expose to financial loss or damage to the extent that (in the opinion of the payment service provider) makes it impossible for the
agent to obtain financial safety.
D- In the event of death of the sole proprietor or individual, or its loss of legal capacity.
E- In the event that its place is moved or closed without the prior written approval of the payment service provider.
F- The agent breach of any provision of these controls.
G- Failure to provide the information requested by the payment service provider.
I- Incapability of the agent to carry out the work assigned to it based on the report of inspection committee or any other
investigative committees formed for this purpose.
2 - The payment service provider must ensure that the agent does not continue to provide its services as a payment agent in the
event of termination of the contract under paragraph 1 above.
3- The provider of the payment service shall announce to the public by any method or means that it deems appropriate upon
termination of the agency contract, with the necessity of publishing the termination notice in the agent’s work area and clearly to
the public.
4- Any party to the agency contract has the right to terminate in the event that one of the parties commits a financial offense, a
felony, or a breach of honor.
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Sixth: Exclusive Terms

1- The terms of exclusivity with payment service providers and other agents are prohibited, as the agent may provide
payment services to more than one provider, provided that:
A- The agent has separate contracts for the provision of such services with each payment service provider with determining
the activities that the agent is prohibited to do.
B - The agent shall provide its services to clients in a transparent manner.
C- The agent shall maintain the confidentiality of the information relating to each service provider separately.
2- The Payment Service Provider that seeks to contract with a person who has already contracted with another Payment
Service Provider to provide its services shall assess the Agent’s ability to manage and handle the various technological
capability and security adequacy of the Agent.
Seventh: Prohibited Activities:
1- The agent is prohibited from doing the following:
A- Working or executing an electronic transaction when there is a problem with the system.
B- Executing the transaction when it is not possible to receive the notification of its completion.
C- Imposing any fees on its own in connection with the provision of services stipulated in the contract.
D- Executing the services provided to the client in the event that the activities that the agent is allowed to practice are
suspended or reduced, and the activities not set in the agency contract.
E- Providing payment services for its own account without the provider’s knowledge of that.
G- Providing any services not subject to the controls and instructions issued in this regard.
H- Discounting of commercial papers.
I- Providing cash advances and credits.
J- Providing mediation services by buying and selling foreign currencies unless authorized by this bank.
2- The payment service provider may specify in the contract other activities that the agent is prohibited from engaging in.
Chapter III
First: Responsibilities of Payment Service Provider
1 - The payment service provider shall be responsible for any act or omission of its agents or external sources used by the
agent in certain activities, and this responsibility extends to their actions even if not included in the terms of the contract, as
long as related to the services of payment agent.
2- Preparing and updating the agent’s due diligence policies and procedures, as well as the operational and organizational
policies and procedures, in line with the services it provides.
3- Ensure the settlement of all financial and technical procedures and obligations and payment of dues in the event of
termination of the agency contract.
4- Ensuring that the agent has a bank account for the transfer of financial receivables between the provider and its agents.
5- Compliance with the policies, procedures and control measures, including the compliance procedures taken by the agent,
and the bank may take into account these measures when any legal action against the payment service provider.
6- The payment service provider shall be responsible for resolving disputes arising between the agent and clients.
7- Publishing an updated list of principal and sub agents, and the nature of the services provided on the website of the
Payment Service Provider, and through another a publishing means that is publicly available.
8- Notify this bank as soon as there are any changes to the information in the list of agents to update their records in the bank.
9- The Payment Service Provider must notify the Bank before moving or closing Agent locations.
10- Ensuring that the agent provides the business assigned to it, through the tools and systems of the payment service
provider.
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11- Obligate its affiliated agents to declare their provided services clearly and explicitly and the commissions charged,
in accordance with the instructions of this bank.
12- Ensuring that the agent does not carry out the business assigned to it before signing the agency contract, or engage in
any electronic payment services business outside the scope of the agency contract.
13- Providing the agent with the operational procedures that show the details of the works assigned to it.
14- Ensure that agents are committed to implementing client due diligence.
15- Develop a list of early warning signs and corrective actions to ensure the agent proactive management by the
payment service provider and then protect clients’ funds.
16- Provide the agents with adequate training to enable them to adequately perform operations and to provide agreed on
services including (training on appropriate client knowledge, client service, maintenance procedures on the
confidentiality of client data and records, money security, record keeping and financial education, dealing with tools and
systems, dealing with clients’ complaints, fraud detection procedures, measures to combat money laundering and
terrorist financing).
17- Providing the infrastructure (systems - networks - devices ....etc.) necessary to provide services to the payment
agent.
Second: - Risk Management
The payment service provider must ensure the existence of a governance and risk management framework in line with
the laws, instructions and controls issued by this bank to ensure that the payment agent services are provided with full
readiness through:
A- Developing a risk management program for the payment agent services which reflects the strategy and policies of its
services.
B- Follow up and manage risks.
C- Determining the treatment of the management of the services of payment agent relevant to risks in a proper manner.
D- Determining the agent's activity and the nature of the services provided by it, taking into account the effects on the
agent's operational and liquidity risks.
E- Assessment the credit position and Financial suitability of the agent every three months to determine its activities in
conjunction with this assessment.
F- Identifying and treating of electronic payment management related to risks in safe manner.
G- Identifying the technological risks and reducing it properly with regard to the security of information and data in
wireless networks.
H- Preparing a business continuity management plan to reduce interruptions or gaps in agents' jobs.
I- Ensure the publication of agent payment services policies and procedures and other relevant information to all
individuals involved in the transaction through communication channels.
J- Submit a comprehensive and periodic report to the payment service provider's board of directors regarding the
operation and efficiency of the payment agent services.
K- Possess systems and staff to monitor and control sufficiently on the operations and services provided by its agents on
an ongoing basis.
Third: Customer Due Diligence
Agents, when performing their client due diligence, must comply with all instructions issued by this bank and Anti-
money laundering and terrorist financing laws and requirements applicable in Iraq, including submitting a report to the
payment service provider for all suspicious activities.

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Chapter IV
First: Supervisory and Oversight Powers of the Bank
1- All electronic payment services and their providers and participants are subject to the supervision of the Bank.
2- The electronic payment service provider, participants and any third party and their agents shall provide information
and data, and not take any actions that affect or prevent the task of supervision, control and cooperation, or prevent it, as
necessary, to accomplish the task of supervision and control by the bank.
3- Bank representatives may inspect the premises of the electronic payment service provider and its agents to monitor
compliance with the standards and policies for controlling information systems.
4- The bank directs the payment service provider to take action or measures against, or on behalf of, the agent, and to
take corrective action resulting from the agent’s action, as the bank may deem appropriate.
Second: Reporting Requirements
1- Each payment service provider must keep the reports on the electronic payment operations of each agent in a manner
it deems appropriate, to ensure that this bank has access to them at the time it deems appropriate, provided that it
includes the following information at minimum:
A- The value, volume and geographical distribution of operations or transactions.
B - Events of theft or robbery.
C - Client complaints.
D- Corrective actions taken to treat the clients’ complaints.
2- Any report or information requested by the bank.
Third: Annual Report
The payment service provider must send to the bank, within a period not exceeding the day (31 March) of each year, a
report that must include the names of the agents, the total number and value of transfers, with a description of the
services provided by each agent for the previous year.
Chapter V
First: clients Protection
The payment service provider and its agents shall take the necessary measures to inform clients of their rights and
responsibilities as follows:
1- Agents shall issue receipts or declarations for the transactions executed by them, and payment service providers shall
provide their agents with the necessary supplies for this purpose.
2- The agent is responsible for deliver or receiving the required documents to and from clients.
3- If the agent has contract with more than one payment service provider, it must ensure that the client database is
maintained independently and separately, and that there is no confusion in the data.
4- The client must be informed of the need to keep the personal identification number (PIN) and other important
information confidential, and not to share this information with third parties, including agents.
Second: Disclosure
The agent must disclose to its clients and at its workplace the following information:
1 - The name and logo of the payment service provider for whom it works.
2- A list of the payment services provided by it.
3- Written notice states that: If the electronic system is breakdown, it may not conduct any transaction.

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4- Written notice states that: payment services are subject to availability of funds.
5- A list of applicable fees for each service, which are collected by the client.
6- Show a copy of the official letter signed by the service provider certifying the approval of the agent by it and the
allowed services.
Third: Moving or Closing Agents' Locations
1- The agent must obtain the prior written approval of the payment service provider to move or close its workplace.
2- The agent must inform the payment service provider of its intention to move its workplace, or close it before a period
of not less than (thirty days) or a longer period in the manner in which may be stipulated in the contract.
3- The agent must inform the clients of a period of not less than (fourteen days) before moving or closing its workplace,
and that the advertisement is placed in a prominent and visible place for the public and the advertisement must state the
date of moving or closing of the place.

Chapter VI
First: Settlement of Transactions
1- All transactions that involve depositing, withdrawing, paying or transferring cash to or from an account must be
instant and in a real-time.
2- Payment service providers must ensure that agents are able to transact in real time and instantly.
Second: Outsourcing
1- The payment service provider may enter into a written contract with any third party to provide services in connection
with business of its agents provided that obtaining the approval of the bank on the form of contracts prior to their
approval.
2- A Service Performance Level Agreement must be entered into between the Payment Service Providers and the third
party.
3- The third party must not perform the activities attributable to the Payment Agent’s services, unless it signs a separate
agreement with the Payment Service Provider to become an agent as stipulated in these controls.

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